City of Cornwall 2017 Development Charges Background Study Council Presentation June 12, 2017
Development Charges Purpose of Development Charges (D.C.) is to recover the capital costs associated with residential and non-residential growth within the municipality The capital costs are in addition to what costs would normally be included as part of a subdivision (i.e. internal roads, watermains, roads, sidewalks, streetlights, etc.) Municipalities are empowered to impose these charges via the Development Charges Act (D.C.A.) 1
Study Process Growth forecast and detailed discussions with staff regarding future needs to service growth Council Presentation Development Industry Consultation Release of D.C. Background Study Public Meeting (minimum 20 days notice and 2 weeks after release of background study) Council to consider by-law for adoption (no earlier than 60 days after the release of the background study) 2
Development Charges Methodology 3
Calculation Methodology 1. Identify amount, type and location of growth Residential and non-residential development DCA prescribed intervals 2. Identify servicing needs to accommodate growth; a D.C. may not provide for: 4 Parkland acquisition General Administration Headquarters Tourism, Arts/Culture Facilities, Museums Landfill Sites and Services, Incineration of Waste Hospitals Vehicles & Equipment Useful life of less than 7 yrs. Computer Equipment
Calculation Methodology (Cont d) 3. D.C. capital needs assessment requires: Consideration of 10-year average historical level of service (planned level of service for Transit services) Council intention that needs will be met Long-term capital and operating cost determination 4. Identify capital costs to provide services to meet the needs Project specific determination 5
Calculation Methodology (Cont d) 5. Capital costs may include Land acquisition (excluding parkland) Capital improvements, acquisitions, leases and construction projects Rolling stock with a useful life of 7 years or more Furniture and equipment for eligible services Library circulation materials Interest costs Studies in connection to the above 6
Calculation Methodology (Cont d) 6. D.C. capital cost assessment must have regard for: Uncommitted excess capacity Grants, subsidies and other contributions Benefit to existing development Statutory 10% deduction (soft services) Amounts in excess of level of service standard calculation Outstanding D.C. credits (where applicable) D.C. reserve funds (where applicable) 7
Calculation Methodology (Cont d) 7. Net costs allocated by type of development 8. Calculate average cost charges 9. D.C. by-law policy considerations: 8 Collection timing (building permit issuance) Statutory and non-statutory exemptions Credit policies (s.38 credits and redevelopment credits) Fee implementation (uniform by use, differentiated by use, exempt developments, phase-in policies) Indexing policies (discretionary or mandatory approach)
D.C. Growth Forecast Following sources reviewed: City of Cornwall Municipal Comprehensive Review Phase 1 Population, Housing and Employment Forecast, 2011-2036; Statistics Canada Census information; City of Cornwall Databook; EMSI (Economic Modeling Specialists Intl.); and Discussion with City staff regarding anticipated residential and non-residential development. D.C. calculations based on growth forecast for the 10-year forecast period (i.e. 2017-2027) 9
D.C. Growth Forecast (cont d) Time Horizon Net Population Residential Residential Units Employment Non-Residential Sq.ft. of Nonresidential GFA Mid 2017 46,641 21,041 24,149 Mid 2027 48,139 22,394 25,640 Mid 2036 49,400 23,080 26,801 Incremental Change Rural 10-year (2017-2027) (17) 10 - - Urban 10-year (2017-2027) 1,516 1,343 1,491 1,934,300 City of Cornwall 10-year (2017-2027) 1,499 1,353 1,491 1,934,300 10
Increase in Need for Service City wide services Transportation Services Fire Services Parks and Recreation Services Library Services Administration Studies Child Care Services Waste Diversion Services Area Specific Urban Area 11 Water Services Wastewater Services
Increase in Need for Service (Cont d) Other services considered within the review, for which no increase in growth-related capital costs were identified EMS Transit Police Homes for the Aged Social Housing Airport Medical Centres 12
Anticipated Capital Needs (Transportation Services) Prj.No Increased Service Needs Attributable to Anticipated Development Active Transportation Less: Potential DC Recoverable Cost Gross Capital Grants, Subsidies and Timing Post Period Other Net Capital Benefit to Residential Cost Estimate Other Contributions (year) Benefit Deductions Cost Existing Total Share (2017$) Attributable to New Development Development 2017-2026 50% 50% Non-Residential Share 1 Bicycle Infrastructure (on-road) 2017-2026 3,870,500 122,971 3,747,529 3,595,657 6,376 145,496 72,748 72,748 2 Sidewalks 2017-2026 2,227,000 70,755 2,156,245 2,068,862 87,384 43,692 43,692 Roads 3 Nick Kaneb Dr. Extension 2018 1,800,000 765,091 1,034,909 90,000 944,909 472,454 472,454 4 Business Park Rd 2027+ 9,000,000 9,000,000 - - - - - 5 Boundary Rd/CNR EA 2018-2021 7,200,000 228,753 6,971,247 6,688,731 141,258 141,258 70,629 70,629 6 Marleau Ave/Ninth St. Upgrade Stage 2 2019-2022 1,700,000 603,362 1,096,638 351,470 745,168 372,584 372,584 7 Marleau Ave/Ninth St. Upgrade Stage 3 2025 5,400,000 1,742,127 3,657,873 1,506,300 2,151,573 1,075,787 1,075,787 8 Brookdale Ave/CN Connect Link EA 2020-2024 10,200,000 3,889,752 6,310,248 1,506,300 4,323,553 480,395 240,197 240,197 9 Pitt St. Widening & Env. Assessment 2026 5,000,000 1,608,088 3,391,912 1,405,880 1,986,032 993,016 993,016 Facilities 10 Municipal Works Yard Redevelopment 2017-2026 36,329,627 1,461,074 34,868,553 33,064,088 1,804,465 902,233 902,233 Total 82,727,127 19,491,972-63,235,155 50,277,288 4,471,187 8,486,680 4,243,340 4,243,340 13
Anticipated Capital Needs (Fire Services) Prj.No Increased Service Needs Attributable to Anticipated Development Facilities Less: Potential DC Recoverable Cost Non-Residential Share 1 New Fire Station and Training Facility 2018 5,000,000 799,642 4,200,358 3,720,592 479,766 239,883 239,883 Equipment Gross Grants, Subsidies and Timing Capital Cost Post Period Net Capital Benefit to Residential Other Contributions (year) Estimate Benefit Cost Existing Total Share Attributable to New (2017$) Development Development 2017-2026 50% 50% - - 2 Training Centre Equipment 2018-2019 145,000 23,190 121,810 107,897 13,913 6,957 6,957 - - - - - - - - - - - - - - Total 5,145,000 822,832 4,322,168 3,828,489-493,679 246,839 246,839 14
Anticipated Capital Needs (Parks and Recreation Services) Prj.No Increased Service Needs Attributable to Anticipated Development Less: Less: Potential DC Recoverable Cost Grants, Subsidies and Gross Capital Post Other (e.g. Net Capital Benefit to Other Residential Timing (year) Cost Estimate Period Subtotal 10% Cost Existing Contributions Total Share (2017$) Benefit Statutory Development Attributable to Deduction) New 2017-2026 Development 95% 5% Non- Residential Share 1 Guindon Park Improvement 2018-2019 250,000-250,000 242,215 7,785 778 7,006 6,656 350 2 Off-Leash Dog Park 2019 90,000-90,000 87,198 2,802 280 2,522 2,396 126 3 Localized Park Improvement (Harbour to College Bike Path) 61,900-61,900 59,973 1,927 193 1,735 1,648 87 4 Lookout Park Development (South of Bergeron Drive) 402,300-402,300 20,115 382,185 38,219 343,967 326,768 17,198 5 Canal Lands - North Bank Bike Path 371,400-371,400 359,835 11,565 1,156 10,408 9,888 520 6 East Front Area - Improved Bike Path Connections 61,900-61,900 59,973 1,927 193 1,735 1,648 87 7 Menard Park Splash Pad 2022 450,000-450,000 22,500 427,500 42,750 384,750 365,513 19,238 8 Benson Centre Soccer Fields 2017 6,430,700-6,430,700 3,215,350 3,065,350 150,000 15,000 135,000 128,250 6,750 9 Skateboard Park / BMX Upgrade 2018-2026 965,000-965,000 934,951 30,049 3,005 27,044 25,691 1,352 10 King George Park Improvements 2018 110,000-110,000 106,575 3,425 343 3,083 2,929 154 11 Pointe Maligne Waterfront Improvements 2017-2018 1,079,000-1,079,000 1,045,402 33,598 3,360 30,238 28,727 1,512 Total 10,272,200-10,272,200 6,154,086 3,065,350 1,052,764 105,276 947,487 900,113 47,374 15
Anticipated Capital Needs (Library Services) Prj.No Increased Service Needs Attributable to Anticipated Development Less: Less: Potential DC Recoverable Cost Grants, Subsidies and Gross Capital Post Other (e.g. Net Capital Benefit to Other Residential Timing (year) Cost Estimate Period Subtotal 10% Cost Existing Contributions Total Share (2017$) Benefit Statutory Development Attributable to Deduction) New 2017-2026 Development 95% 5% Non- Residential Share 1 Collection Materials 2017-2026 101,871-101,871-101,871 10,187 91,684 87,100 4,584 2 RFID Phase 1 2017 130,000-130,000 125,952 4,048 405 3,643 3,461 182 Total 231,871-231,871 125,952-105,919 10,592 95,327 90,561 4,766 16
Anticipated Capital Needs (Administration Studies) Prj.No Less: Less: Potential DC Recoverable Cost Grants, Gross Subsidies and Post Other (e.g. Capital Cost Net Capital Benefit to Other Residential Timing (year) Period Subtotal 10% Estimate Cost Existing Contributions Total Share Benefit Statutory (2017$) Development Attributable to Deduction) New Development 2017-2026 50% 50% Increased Service Needs Attributable to Anticipated Development Non- Residential Share 1 Fire Station Feasibility Study 2017 50,000-50,000 12,500 37,500 37,500 18,750 18,750 2 Fire Master Plan 200,000-200,000 50,000 150,000 150,000 75,000 75,000 3 Active Transportation Master Plan 103,700-103,700 25,925 77,775 77,775 38,888 38,888 4 Recreation Master Plan Review 2020 92,100-92,100 23,025 69,075 6,908 62,168 31,084 31,084 5 Waterfront Plan 75,000-75,000 37,500 37,500 3,750 33,750 16,875 16,875 6 Roads Needs Study 50,000-50,000 47,974 2,026 2,026 1,013 1,013 7 Transporation Master Plan 100,000-100,000 25,000 75,000 75,000 37,500 37,500 8 Library Strategic Plan 50,000-50,000 12,500 37,500 3,750 33,750 16,875 16,875 9 EMS Master Plan 50,000-50,000 12,500 37,500 3,750 33,750 16,875 16,875 10 D.C. Background Study 2017/2022 120,000-120,000-120,000 12,000 108,000 54,000 54,000 11 Asset Management Plan 2021/2026 300,000-300,000 287,842 12,158 1,216 10,942 5,471 5,471 12 Zoning By-Law Update 2018 200,000-200,000 100,000 100,000 10,000 90,000 45,000 45,000 13 Economic Development Strategy Plan 2020 100,000-100,000 75,000 25,000 2,500 22,500 11,250 11,250 14 Long Term Financial Plan 50,000-50,000 37,500 12,500 1,250 11,250 5,625 5,625 15 Solid Waste Management Master Plan 150,000-150,000 143,921 6,079 608 5,471 2,735 2,735 Total 1,690,800-1,690,800 891,187-799,613 45,731 753,882 376,941 376,941 17
Anticipated Capital Needs (Child Care Services) Prj.No Increased Service Needs Attributable to Anticipated Development Less: Less: Potential DC Recoverable Cost Grants, Gross Subsidies and Post Other (e.g. Capital Cost Net Capital Benefit to Other Residential Timing (year) Period Subtotal 10% Estimate Cost Existing Contributions Total Share Benefit Statutory (2017$) Development Attributable to Deduction) New 2017-2026 Development 100% 0% 1 Additional Child Care Spaces 2017-2026 1,611,202-1,611,202-1,611,202 - - - - - Non- Residential Share Total 1,611,202-1,611,202-1,611,202 - - - - - 18
Anticipated Capital Needs (Waste Diversion Services) Prj.No Increased Service Needs Attributable to Anticipated Development Timing (year) Gross Capital Cost Estimate Post Period Benefit Other Deductions Net Capital Cost Less: Less: Potential DC Recoverable Cost Residential Share Non-Residential Share (2017$) Development Development Deduction) 2017-2026 50% 50% 1 Solid Waste / Recycling Review Implementation 2018-2025 153,000-310 152,690 146,800 5,890 589 5,890 2,945 2,945 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Benefit to Existing Grants, Subsidies and Other Contributions Attributable to New Subtotal Other (e.g. 10% Statutory Total Total 153,000-310 152,690 146,800-5,890 589 5,890 2,945 2,945 19
Anticipated Capital Needs (Urban Area Water Services) Prj.No Increased Service Needs Attributable to Anticipated Development Less: Potential DC Recoverable Cost Gross Grants, Subsidies and Timing Capital Cost Post Period Net Capital Benefit to Residential Other Contributions (year) Estimate Benefit Cost Existing Total Share Attributable to New (2017$) Development Development 2017-2026 50% 50% Non-Residential Share 1 New Watermain - Powerdam Dr. (Riverdale Ave. - Tollgate Rd.) 2018 300,000-300,000-300,000 150,000 150,000 2 New Watermain - Powerdam Dr. (Tollgate Rd. - Vincent Massey Dr.) 2019 300,000-300,000-300,000 150,000 150,000 3 Business Park Watermains 2018-2022 1,250,000-1,250,000-1,250,000 - - - - Total 1,850,000-1,850,000-1,250,000 600,000 300,000 300,000 20
Anticipated Capital Needs (Urban Area Wastewater Services) Prj.No Increased Service Needs Attributable to Anticipated Development Timing (year) Gross Capital Cost Estimate Post Period Benefit Net Capital Cost Benefit to Existing Less: Grants, Subsidies and Other Contributions Attributable to New Potential DC Recoverable Cost Residential Share Non-Residential Share (2017$) Development Development 2017-2026 50% 50% 1 Combined Sewer Separation 2017-2026 5,183,000 156,788 5,026,212 4,815,021 211,191 105,596 105,596 Total Total 5,183,000 156,788 5,026,212 4,815,021-211,191 105,596 105,596 21
Anticipated Capital Needs Benefit to Existing Development $66,238,823 Gross Capital Costs $108.9 million Other Deductions $310 Post Period Benefit $20,471,592 19% Grants, Subsidies and Other Contributions Attributable to New Development $10,397,739 9% 22 D.C. Recoverable $11,593,548 11% Other (e.g. 10% Statutory Deduction) $162,189 0.1%
D.C. Recoverable Capital Costs (2017-2026) Total D.C. Recoverable Costs $11.6 million Waste Diversion Services $5,301 0.05% Transportation Services $8,486,680 73% Fire Services $493,679 4% Parks & Recreation Services $947,487 8% Administration Studies $753,882 7% 23 Child Care Services $- 0.00% Library Services $95,327 1% Water Services $600,000 5% Wastewater Services $211,191 2%
Calculated Schedule of Development Charges RESIDENTIAL NON-RESIDENTIAL Service Single and Semi- Detached Dwelling Apartments - 2 Bedrooms + Apartments - Bachelor and 1 Bedroom Other Multiples Special Care/Special Dwelling Units (per ft² of Gross Floor Area) Municipal Wide Services: Transportation Services 3,477 2,484 1,342 3,302 1,342 2.19 Fire Services 202 144 78 192 78 0.13 Parks and Recreation Services 738 527 285 701 285 0.02 Library Services 74 53 29 70 29 0.00 Administration Studies 309 221 119 293 119 0.19 Child Care Services - - - - - - Waste Diversion Services 2 1 1 2 1 0.00 Total Municipal Wide Services 4,802 3,430 1,854 4,560 1,854 2.53 Urban Services Wastewater Services 87 62 34 83 34 0.03 Water Services 248 177 96 236 96 0.09 Total Urban Services 335 239 130 319 130 0.12 GRAND TOTAL RURAL AREA 4,802 3,430 1,854 4,560 1,854 2.53 GRAND TOTAL URBAN AREA 5,137 3,669 1,984 4,879 1,984 2.65 24
Budget Impact Imposition of D.C.s lowers tax and user fee funding requirements Based on charges calculated herein and historical building permit data, revenue forgone from not imposing D.C.s between 2011-2015 estimated at $4.2 million ($840,000 annually) Potential revenue represents approximately 1.3% of annual tax levy 25
Charge Per Single Detached Unit ($) Residential D.C. Comparison ($/serviced single detached dwelling unit) 35,000 Development Charge Rates for Municipalities in the Vicinity of Cornwall Residential Per Fully Serviced Single Detached Unit (As of June 1, 2017) 30,000 Lower/Single Tier Upper Tier Connection Fee Education 25,000 20,000 15,000 10,000 5,000 - Notes: (1) Impost/impose fee listed under connection fees. 26
Charge Per Sq.Ft. of GFA ($) Commercial D.C. Comparison ($/serviced sq.ft. of gross floor area) Development Charge Rates for Municipalities in the Vicinity of Cornwall Commercial/Retail Per Fully Serviced Square Foot of GFA (As of June 1, 2017) 25.00 Lower/Single Tier Upper Tier Connection Fee Education 20.00 15.00 10.00 5.00-27
Charge Per Sq.Ft. of GFA ($) Industrial D.C. Comparison ($/serviced sq.ft. of gross floor area) 12.00 Development Charge Rates for Municipalities in the Vicinity of Cornwall Industrial Per Fully Serviced Square Foot of GFA (As of June 1, 2017) Lower/Single Tier Upper Tier Connection Fee Education 10.00 8.00 6.00 4.00 2.00 0.00 28
Policy Issues Charge Applicability, Timing and Deferral Agreements Recommend that the City s D.C. by-law provide for calculation and collection of the charges at the time of building permit issuance The City has ability to enter into deferral or accelerated payment agreements Recommend that water and wastewater services D.C.s be imposed for the urban serviced area only, and that all other charges be imposed on a City-wide basis 29
Policy Issues (cont d) Transition policy As no D.C.s currently exist, Council may wish to consider phasing-in the implementation of the charge over multiple years (e.g. equal instalments over the 5- year by-law term) This would allow Council to be able to gauge the impact on D.C.s on development D.C. revenue forgone during phase-in period must be be funded from non-d.c. sources (e.g. taxes, user fees, reserves or other financial resources) 30
Policy Issues (cont d) Exemptions The D.C.A. provides for some mandatory exemptions but also allows municipalities the ability to provide exemptions by by-law at the municipality s discretion Exemptions provide that certain classes of development will not be required to pay the charge and may be determined by: Use (e.g. places of worship, farm buildings) Geographic area Development type Service exemption 31
Policy Issues (cont d) Exemptions (Cont d) The Act is specific in identifying that these costs may not be made up by increases in the D.C. for other classes of development In effect, it is a loss of revenue to the municipality which will have to be funded from non-d.c. sources (e.g. taxes, user fees, reserves or other financial resources) 32
Policy Issues (cont d) D.C. Statutory Exemptions Industrial additions of up to and including 50% of the existing gross floor area of the building - for industrial additions which exceed 50% of the existing gross floor area, only the portion of the addition in excess of 50% is subject to development charges Land used for Municipal or Board of Education purposes Residential development that results in only the enlargement of an existing dwelling unit, or that results only in the creation of up to two additional dwelling units 33
Policy Issues (cont d) Non-Statutory Exemptions Recommend that non-statutory exemptions are considered to achieve policy objectives Most common non-statutory exemptions across Ontario include exemptions for: Agricultural and farm uses Places of worship Hospitals College or University buildings 34
Policy Issues (cont d) Redevelopment Credits Often provided for development involving the conversion of existing floor space from one use to another, or if an existing building on site is being demolished and replaced Credits commonly witnessed for a 5-year period from demolition or conversion Indexing 35 Allows for adjustment of charges to reflect underlying cost increases and reduces municipal cash flow impact between statutory by-law reviews Commonly delegated to staff for annual adjustment
Next Steps Receive Council input on the study findings; Update the draft study and present findings to development industry stakeholders for comment; Prepare formal D.C. Background Study and draft By-Law; Release D.C. Background Study for public review; Undertake a statutory public meeting (no less than two weeks after the D.C. Background Study is released); 36
Next Steps (Cont d) Receive input from the public on the matter and consider any amendments to the background study and by-law; Determine if a subsequent public meeting is required on the matter; Council to approve the D.C. Background Study and consider adoption of D.C. by-law (no earlier than 60 days after the D.C. Background Study is released). 37
D.C. Comparison Notes Commercial D.C. comparison notes: 1) Impost fee listed under connection fee 2) Includes 50% discount on Town-wide services 3) No D.C. on first building permit up to 3,500 ft 2 4) First 3,000 ft 2 100%; next 2,000 ft 2 75%; next 5,000 ft 2 50%; next 10,000 ft 2 35%; any beyond 20,000 ft 2 5% 5) First 2,500 ft 2 $0.3938; next 2,500 ft 2 $0.20; next 25,000 ft 2 $0.15; next 25,000 ft 2 $0.10; any beyond 55,000 ft 2 $0.05 6) Exempt from development fees if located in the downtown district or on a strategic property (per the official plan) 7) Upper tier charges are exempt 8) Renfrew up to 5,000 ft 2 - $2.25/ ft 2, over 5,000 - $2.61/ ft 2 9) Impose Fee shall be established at an amount as recommended by Administration based on the expected usage 38
D.C. Comparison Notes Industrial D.C. comparison notes: 1) The Nation (Limoges) no D.C. on first building permit up to 3,500 ft 2 2) Perth - first 3,000 ft 2 100%; next 2,000 ft 2 75%; next 5,000 ft 2 50%; next 10,000 ft 2 35%; any beyond 20,000 ft 2 5% 3) Carleton Place: Exempt from development fees if located in the downtown district or on a strategic property (per the official plan) 4) Industrial uses located in industrial zones are exempt 5) Lower tier charges are exempt 6) Upper tier charges are exempt 7) North Dundas - first 2,500 ft 2 $0.3938; next 2,500 ft 2 $0.20; next 25,000 ft 2 $0.15; next 25,000 ft 2 $0.10; any beyond 55,000 ft 2 $0.05 8) Renfrew up to 5,000 ft 2 - $2.25/ ft 2, over 5,000 - $2.61/ ft 2 9) Impose Fee shall be established at an amount as recommended by Administration based on the expected usage 39